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Inspired by a military context, we study a Stackelberg production game wherea country's government, the leader, wants to maximize the production ofmilitary assets. The leader does so by allocating his resources among a set ofproduction facilities. His opponent, the follower, observes this allocation andtries to destroy the associated production as much as possible by allocatinghis destructive resources, for example bombs, among these facilities. In thispaper, we identify a follower's optimal strategy. For the leader, we show thatan optimal production strategy can be found in the class of so-calledseried-balanced strategies. We present a linear time algorithm that finds anoptimal strategy in this class.

Finding optimal Stackelberg production strategies: How to produce in times of war?